The AWG
reconvened on Tuesday evening, with parties making general
statements. AOSIS, LDCs, INDIA and INDONESIA reiterated calls for
deep and ambitious commitments from Annex I parties. The EU
emphasized the availability of low or no-cost mitigation options,
and noted the need for a strong price signal to inform investment
decisions. The RUSSIAN FEDERATION underscored considering national
circumstances.

JAPAN
stressed the need for a common understanding of factors and criteria
to evaluate mitigation potential on a sectoral basis, as well as
fairness in burden sharing. NEW ZEALAND noted new plans to target
public sector emissions and develop an emissions trading scheme. He
stated that Annex I parties’ actions “cannot be divorced” from the
broader global analysis. ICELAND noted many parties’ declarations of
long-term targets and praised these national voluntary actions as
building blocks for a future regime.

SAUDI ARABIA
said any future arrangement should take into account the impacts of
Annex I parties’ targets on developing countries. BANGLADESH noted
climate change’s potential to cause large-scale displacement of
people.

The US, UK,
European and Australian BUSINESS COUNCILS FOR SUSTAINABLE ENERGY
supported a legally-binding multilateral regime after 2012, urging
agreement in Bali on a new negotiating round that would reach
agreement on a framework in 2009. CLIMATE ACTION NETWORK supported
developing criteria for some countries that are economically-ready
to join Annex B, suggesting Saudi Arabia, Singapore and Republic of
Korea as candidates.

ANALYSIS OF MITIGATION POTENTIALS AND REVIEW OF WORK PROGRAMME:
AWG Chair Charles introduced the agenda item on mitigation
potentials and ranges of Annex I emissions objectives, and the item
on the work programme and schedule of future sessions. He proposed,
and parties agreed to, a contact group that would start work on
Wednesday at 1:30 pm.

CONTACT
GROUPS AND INFORMAL CONSULTATIONS

ADAPTATION FUND:
Draft SBI conclusions were discussed during informal consultations
and a contact group. The contact group meeting worked through the
text paragraph-by-paragraph. TUVALU expressed disappointment that
his proposal for a special funding window for SIDS was not
reflected. However, delegates agreed to TUVALU’s proposal to
indicate that the draft COP/MOP decision would be completed, “inter
alia,” with elements on institutional arrangements. Similar
wording was also added to a paragraph on continuing deliberations at
SB 27. The contact group then completed its work.

BUDGET:
During a morning contact group, the Secretariat distributed a note
on the records management system and a table outlining a reduction
scenario of US$1,754,900. Stressing the increasing workload, UNFCCC
Executive Secretary Yvo de Boer identified cost-cutting measures
already undertaken, and explained that any further cuts would affect
the Secretariat’s substantive activities. The G-77/CHINA and CANADA
expressed their support for the proposed budget, with the G-77/CHINA
identifying some areas where they might show flexibility. The US
reiterated its support for zero nominal growth but said he could
also show some flexibility. The EU and the RUSSIAN FEDERATION
indicated that they would not block a consensus. Chair Dovland noted
a possible consensus on cuts identified in the first two lines of
the table, amounting to US$650,000.

DEFORESTATION:
During informal consultations, Co-Chair Rosland conveyed a message
from SBSTA Chair Kumarsingh reminding parties of the need to stick
to the mandate that was carefully worded at COP 11. Delegates then
proceeded with their line-by-line consideration of the Co-Chairs’
draft COP decision. Discussion focused on, inter alia,
national reference emissions levels, the use of guidelines for
reporting, a possible annex with indicative modalities, and
generally whether to be more specific or to continue an exploration
of a range of actions. Discussions will continue on Wednesday in a
small drafting group facilitated by Thelma Krug (Brazil).

IPCC GUIDELINES FOR NATIONAL GREENHOUSE GAS INVENTORIES:
During informal consultations, parties accepted text noting the
importance of continuous improvement of greenhouse gas inventories
and paragraphs regarding harvested wood products. Parties agreed to
delete a paragraph referring to the 2008 IPCC workshop on the IPCC
2006 guidelines. Regarding methodological issues, delegates
compromised by agreeing to recognize that there are methodological
issues, without highlighting specifics. In the final contact group
session in the afternoon, the revised text was approved with minor
editorial changes.

PRIVILEGES AND IMMUNITIES:
In the contact group, parties approved the Chair’s draft conclusions
after agreeing to revised text initially proposed by the EU on the
need for an effective, legally-sound, long-term solution, including
review procedures. A paragraph referring to holding a workshop to
further the work on privileges and immunities was deleted on
budgetary and procedural grounds. Provision was made to incorporate
Brazil’s suggestion to refer to formal declarations by public and
private legal entities and the establishment of a special review
committee in document
FCCC/SBI/2007/MISC.4, as an addendum. There
was also discussion concerning a Brazilian suggestion for a
paragraph requesting the Executive Secretary to include resource
requirements for activities in the programme budget for the biennium
2008-2009. Nigeria, for the G-77/CHINA, drew attention to budgetary
cuts, which would have an impact on the implementation of decisions
on privileges and immunities. Chair Watkinson stressed that
budgetary issues should be raised explicitly within the budget
contact group. This paragraph was then deleted.

TECHNOLOGY TRANSFER:
On Tuesday morning, informal negotiations resumed, with parties
considering text on the functions of the constituted body in the
terms of reference. However, agreement could not be reached.
Regarding membership, developing countries suggested removing the
reference to resource persons from the Climate Technology Initiative
among the list of examples of organizations. The Co-Chairs suggested
that the draft terms of reference for the constituted body be
forwarded as they are to Bali, but one developed country indicated
that it may not support this, noting that forwarding text from SB 25
in Nairobi had not resulted in agreement in Bonn at SB 26.

In the
afternoon, delegates reached agreement on most of the paragraphs of
the draft SBSTA conclusions. Outstanding issues include the
welcoming of informal initiatives by Japan and China in facilitating
dialogue and the continuance of the pilot project on networking
between the UNFCCC technology information clearing house and
regional and national technology information centers.

WORKSHOP ON
MITIGATION: ENERGY EFFICIENCY

On Tuesday
morning, an in-session workshop was held on
energy efficiency,
including industry, and residential and commercial end use. The
workshop, which had been requested by SBSTA 23, was facilitated by
SBSTA Vice-Chair Ermira Fida (Albania).

Laura Cozzi,
International Energy Agency, presented the World Energy Outlook
2006. She explained that baseline scenarios will involve a dramatic
increase in global primary energy demand by 2030, particularly in
China and India, and that urgent action is required given that these
countries will “lock in” their investment within the next decade in
energy infrastructure that will last for 60 years.

Yang Hongwei,
China, presented on energy conservation and energy efficiency
improvement in China. He outlined measures such as the country’s
Five-Year Plan of Social Economic Development, which includes a
target of 20% improvement in energy efficiency per unit of GDP by
2010 from 2005 levels.

Jens
Schuberth, Germany, highlighted energy efficiency policies in
Germany and stressed the importance of concentrating decision-making
on energy efficiency within one department at the national level.
Jean-Pierre Tabet, France, presented on the white certificate scheme
in France, whereby energy suppliers have to meet an energy savings
target or pay a penalty.

Mark
Toorenburg, Oxxio, the Netherlands, presented a case study on how to
roll-out new LED lighting technology, noting that this technology is
ten times more efficient than a traditional bulb and will last 50
times longer. José Romero, Switzerland, reported on the Swiss energy
model and outlined actions at the national and canton level.

Toshiykuki
Shirai, Japan, estimated that 60% of global mitigation potential is
in energy efficiency, and highlighted the role of sectoral
approaches and international cooperation.

During the
subsequent discussion, delegates addressed international energy
efficiency agreements. Shirai highlighted Japan’s focus on the Asian
region and Vinois explained that such agreements could cover a range
of issues, but that finding a common understanding would be a
gradual process.

WORKSHOP ON
MITIGATION: POWER GENERATION

This
in-session workshop on mitigation took place on Tuesday afternoon,
and focused on
power generation, including clean fossil fuels and
renewable energy.

Jean-Arnold Vinois, European Commission, discussed the EU’s
target of a 20% market share for renewables by 2020, as well as work
on carbon capture and storage (CCS). Zhang Hongwei, China, indicated
that per capita electricity use in China remains low, and
outlined China’s national policies and measures, including hydro,
wind, thermal and nuclear power development. Matthew Webb, UK, and
Li Gao, China, presented on the new zero emissions coal initiative,
which includes the construction and operation of a CCS demonstration
project in China between 2010-2014.

Kai Sipilä,
Finland, presented plans to increase the proportion of biofuel by as
much as 30% in future blended fuels. Bart Stoffer, US, presented on
investments in low and zero emissions technology. Mariana Kasprzyk,
Uruguay, presented on national experiences with electricity
generation from biogas released from landfills, emphasizing
co-benefits with the waste sector. Bryan Hannegan, US, identified
various technological challenges, including increasing grid
efficiency and sending the right price signals to consumers.

Christoph
Erdmenger, Germany, demonstrated how his country will reduce its
emissions by moving increasingly from coal to gas and renewables.
Klaus Radunsky, Austria,
presented a case study of a biomass power plant in Vienna. Bengt
Johansson, Sweden, reflected on measures to decrease
fossil fuel dependency for heat and electricity generation in
Sweden, noting the impact of a carbon tax introduced in 1991..

In the
ensuing discussion, INDIA stressed the need for technology transfer,
and said all energy sources should be considered, including advanced
fossil fuel technologies and nuclear. SAUDI ARABIA said that
technologies employed should be cost-effective, efficient, reliable,
socially acceptable, and based on a suite of environmental criteria,
including biodiversity and noise pollution, rather than on emissions
alone.

IN THE CORRIDORS

Some
delegates were detecting an increase in energy levels on Tuesday,
with discussions on mitigation and the evening AWG session eliciting
comments. While some delegations were praising the “positive” and
“useful” discussions on mitigation over the past two days, others
were suggesting that the talk in the round-table and in-session
workshops must now translate into a shift in parties’ positions.
“How many workshops does it take for us to convert to
energy-efficient light bulbs?” asked one.

Meanwhile,
perplexity persisted in the
deforestation discussions, with several
delegates describing the situation as “a mess.” One
esoterically-inclined participant felt the discussions were in
danger of moving “away from text to philosophy,” posing the
question: “If a delegate falls over in a forest and nobody hears,
has he really fallen?”